A strategic review of sales and University-wide savings optimization looked at the University Campus Store and Media Production Services (MOS) to determine whether each unit was capturing all of the sales it could based on department annual spending compared to their product offerings. After an extensive review of spend activity across the University it became extremely evident increase sales for the ancillaries were possible at a cost savings to the buying departments. The project initiative was launched in 2015 and since its launched as increased sales in these ancillary units by over $240 thousand in year 1 (or 82%) and over $385 thousand the following year for MPS alone (or over 130% compared to the base pre-launch year). In the Campus Store over the two year period sales increased over $263 thousand and over $447 thousand for the initial two years, while saving departments close to $200 thousand in avoidable costs and taxes. Overall, the strategy roll-out was a win-win for the ancillary units and University departments!

Criteria

Please submit one paragraph describing how the proposal fulfills each of the evaluation criteria.

Transferability

This project is easily replicated across all University's and businesses that have internal support (store) operations or production departments along with a procurement department. The key to unlocking easy additional savings for the University while increasing ancillary sales is a partnership between procurement and internal support units (ancillaries). Developing this partnership by ensuring your procurement area works with unit requests and connects needs to areas on campus that can fulfil those needs is all that is required to increase university sales and savings. Essentially, procurement operates as the lead connection for all buying requests and sorts buying needs first againt internal units that can fulfil the needs, only where the University does not have the central support capacity do needs go out for RFP. Then, working with the central support units, these areas develop both in-house capabilities and vendors of records, enabling the ancillaries to operating as an extensive of procurement as a central specialized strategic sourcing agent for departments. In turn, the ancillaries are able to provide departments multiple quotes for internal and/or external production that eliminates the tax for the department (as its absorbed into margin by the ancillaries). Departments are willing adopters of this type of project because not only do they save operating funds, they gain transparency on costing options that they themselves do not need to source and save tax.

Quality Impact

Overall the departments adopting the new strategic approach have merited and commented on the increased transparency and quality of the products they are able to acquire at a lower price! Compliments from the departments have increased as the ancillary units are more than supporting savings but also providing departments pricing options putting more decision making power in the hands of departments and enabling those departments to select upgraded quality options that they would have otherwise not known through previous procurement approaches. The change in approach has improved the relationship of buying departments with central support ancillaries growing the relationship for additional opportunity discussions and further business expansion. Over the two years assessed the project has increase ancillary sales by over $1 million and the University departments have saved over $300 thousand! The project continues in 2017/18 growing in momentum with McMaster looking forward to tabulating future years results.

Productivity Impact

Essentially this initiative has saved departments time in sourcing their needs. It has put the buying for specialized items in the hands of on-campus experts! It has also saved procurement time by reducing unnecessary outsourcing and working with the ancillary units to ensure they can fulfil needs while also complying with the Broader Public Sector Accountability Act. Overall, this initiative has increased the purchasing power of our central support units further reducing price lists. This centralized sourcing solution has saved units time, reduced pricing for all, and has delivered a win-win opportunity for ancillaries and departments, and ultimately the University!

Innovation

This project is innovative because it required no additional FTEs it was simply a matter of making partnership connections across multiple departments. Once the connections are made the increase sales and savings were easy to achieve as both internal support units (ancillaries) were doing more of what they do best; Even better by increasing the sales through these units the ancillary units themselves were able to increase their vendor pricing and purchasing relationships resulting in reduced core costs and pricing lists. For the Campus Store the increase in business through its offerings to departments has helped to drive down other prices within the store supporting our students.